Kuala Lumpur: Malaysia’s move to increase its biodiesel mandate from B10 to B15 is expected to strengthen domestic demand for palm oil and reduce the country’s dependence on export markets, according to Federal Land Development Authority (Felda) Chairman Datuk Seri Ahmad Shabery Cheek.
Speaking in Kuala Lumpur, Ahmad Shabery said the higher biodiesel blend requirement would encourage greater use of locally produced palm oil, helping to support the plantation sector and provide greater income security for settlers, The Edge Malaysia reported.
He noted that while export markets remain important for earning foreign exchange, they are often accompanied by restrictions such as quotas, taxes and other trade conditions. Expanding domestic consumption, he said, would help shield the industry from such external pressures.
The B15 mandate, which came into effect on June 1, raises the palm-oil-based biodiesel content in fuel from 10 per cent to 15 per cent. The policy is also expected to encourage biodiesel producers to increase production and improve the utilisation of existing processing facilities.
According to Ahmad Shabery, Malaysia currently has 20 biodiesel plants with enough installed capacity to support biodiesel blends of up to 30 per cent. However, many of these facilities are operating below their potential because fuel demand has until now been limited to the B10 programme at fuel stations and B7 usage in certain industrial sectors.
He said the implementation of B15 would increase biodiesel consumption across the country, allowing production plants to operate at higher capacity levels while helping to maintain stability in palm oil prices through stronger domestic demand.
Malaysia has the capability to further expand biodiesel use in the years ahead, he added. The country could potentially utilise between five and six million tonnes of palm oil annually for biodiesel production without affecting domestic food requirements.
Malaysia produces approximately 20 million tonnes of palm oil each year. Of that volume, around three million tonnes are consumed by the food sector for products such as cooking oil and margarine, while about one million tonnes are currently used for biodiesel production.
The remaining 15 to 16 million tonnes are largely dependent on export markets. Increasing biodiesel consumption within the country, Ahmad Shabery said, would help reduce that dependence while creating a more stable and resilient market for the palm oil industry.
He made the remarks after witnessing the signing of a memorandum of understanding between Felda and Encorp Berhad for a housing project for Felda employees.
